Artificial Intelligence and Blockchain: A Transformational Tipping Point
A report from Moody’s Investors Service published on Sep. 6 predicts that artificial intelligence (AI) and blockchain technologies have reached a “tipping point” that will reshape industries and create new markets. The combined impact of AI and distributed ledger technologies (DLTs), like blockchain, goes beyond corporate balance sheets and will likely lead to the shrinking or disappearance of established industries while birthing new ones.
“Transformative technologies can shrink or wipe out established sectors. AI will drive the emergence of new sectors, such as content generation, mobility, education, or healthcare. DLT has already given rise to cryptocurrencies and decentralized finance, though their track record has been uneven.”
The report also highlights the positive effects of AI and DLT. AI will boost economic growth by automating tasks and offsetting the impact of aging populations. DLT fosters financial inclusion and modernizes payment systems. However, it may take until the next decade for these benefits to materialize fully.
The Impact on Global Financial Markets
AI and DLT will enhance process efficiency, create new products, and improve credit profiles for financial firms, provided that financial, regulatory, and cybersecurity risks are adequately addressed.
The report emphasizes that the transformation will bring both opportunities and risks. Credit risk measures, including business strategy, financial performance, governance, risk management, and industry and economy-level changes, will be influenced by these technologies.
“The overall economic and financial effects of technological changes are likely to be positive. However, the distribution of costs and benefits among people, companies, and countries will differ significantly.”
Hot Take
The convergence of AI and blockchain technologies marks a turning point that will reshape industries and create new opportunities. While there are challenges and risks to address, the potential benefits for economic growth, financial markets, and societal progress are substantial. It is crucial for individuals, companies, and countries to adapt and navigate this transformative landscape to ensure a fair and inclusive distribution of rewards.
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